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29 Mar 2012

Faster, higher, stronger - patent law reform in an Olympic year: Part 1

by Richard Hoad, Deborah Polites

The Intellectual Property Amendment (Raising the Bar) Bill will make significant changes to the patent system, designed to discourage speculative patents and make it more difficult to obtain patent protection.

The Commonwealth Government has adopted an athletics metaphor for new reforms to Australia’s intellectual property legislation. The Intellectual Property Amendment (Raising the Bar) Bill will introduce wide-ranging reforms to Australia’s intellectual property laws, particularly to patent and trade mark laws.

The Bill was passed by Parliament on 20 March 2012 and is currently awaiting royal assent. This article focuses on some of the more significant changes to the patent system, designed to discourage speculative patents and make it more difficult to obtain patent protection.

Higher hurdles for patentability

The Bill includes four key amendments designed to raise the quality of granted patents by strengthening the requirements for patentability. These amendments address some of the issues raised regarding the patentability requirements in the inquiry last year into gene patents. The key changes are:

  • a more stringent test for whether the subject of a patent application "involves an inventive step";
  • more onerous requirements for patent applicants to disclose full details of their invention;
  • a higher standard for the requirement that a patented invention be "useful"; and
  • a number of changes to the considerations and standards applied by the Commissioner of Patents during the application and examination processes, all designed to avoid patents being granted if a court would be likely to revoke them.

Inventive step

The most fundamental requirements for obtaining a patent are demonstrating that an alleged invention is:

  • new; and 
  • involves an inventive step (or, in the case of an innovation patent, an innovative step).

The Bill will make it more difficult to meet the second of these two criteria.

Currently, the inventive step test principally involves comparing the invention to the "common general knowledge" in Australia at the relevant time, which is essentially the background knowledge of a skilled person working in the relevant field. The Bill will expand “common general knowledge” – it will go beyond what is known in Australia to encompass what is known by those working in the field throughout the world.

This change is designed to bring Australia’s laws more into line with our major trading partners. In practice, it will also make it considerably easier for parties to litigation to identify relevant experts, particularly in frontier areas of technology where there is a limited pool of experts in Australia or where the available experts are associated with one of the parties. This will also lead to economies in cross-border patent litigation, as parties can use the same expert witnesses in patent litigation in Australia and related overseas proceedings.

As well as the common general knowledge in Australia, a court can consider certain additional documents in assessing inventive step. Under the current law these can only be considered if a skilled person in the field would have "ascertained, understood and regarded [them] as relevant".

This requirement will be removed. Consistent with the position adopted by Australia’s major trading partners, it will be sufficient that the information has been made publicly available. This will increase the prior art available in assessing inventive step, and correspondingly make it somewhat more difficult to obtain and defend a patent.

Full description

The requirement on a patentee to disclose the invention fully has also been tightened. A patent specification will need to disclose the invention in a manner which is clear enough and complete enough for the invention to be performed.

Currently it is sufficient if the specification enables the skilled addressee to produce something within the scope of each claim without applying inventive capacity or undertaking prolonged study. The changes are designed to make the disclosure such that the skilled addressee can produce all aspects of the invention claimed in the patent. This is consistent with the philosophy underlying the patent system: the patentee is granted a monopoly in return for full disclosure of how to produce the invention.

“Fair basis”

The changes also strengthen the current requirement that the claimed invention be "fairly based" on the description in the specification, providing a means for rejecting unduly speculative claims.

The claims must now be supported by the matter disclosed in the specification. This is intended to align Australian law with the law in overseas jurisdictions where it is necessary to show that:

  • there is a basis in the specification for each claim; and
  • the scope of the claims is no broader than the disclosure in the specification.

A related change concerns the time at which a court assesses whether the full description requirement is satisfied. The current position is that an invention only needs to be fully described at the time of grant. The Bill provides that amendments are not allowable if they will extend the subject matter beyond that disclosed at the time of filing.

Utility

The requirement that a patented invention be "useful" will now be defined to mean that the invention:

  • has a "specific, substantial and credible" use (this requirement is based on the law in the United States); and
  • actually works as promised in the specification.

While this is designed to discourage speculative patents, it is unclear whether it will have much practical impact. The change is described as a "clarification" rather than replacing existing case law. The Government's explanatory memorandum emphasises that there is no requirement that the patentee demonstrate commercial viability. This is appropriate: the invention disclosed in a patent specification must be useful but should not be held to the standards that might ultimately be imposed by the marketplace.

In the next edition of Insights we'll look at the other changes to patent law made by the Intellectual Property Amendment (Raising the Bar) Bill, including to various exemptions to infringement.

 

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.